HCMC – Both the Ministry of Industry and Trade and the HCMC Department of Industry and Trade are mulling ways to fight the gas price volatility following the sharp rise in the price of this essential commodity on the market lately.
HCMC authorities plan to include gas in the city’s price stabilization program, seeking to convince gas traders to join this scheme now that the gas price has hit the excessively high price of over VND420,000 per 12-kilo container.
Meanwhile, the trade ministry also unveiled intention to seek appropriate management methods for this essential commodity at its online meeting on Tuesday.
Le Ngoc Dao, deputy director of HCMC’s trade department, said retail gas prices have surged by VND76,000 per 12-kilo container since early January.
This price spike is ascribed to the rising global prices and high import tax rates. Therefore, the city’s trade department proposed the ministry have policies to stabilize gas prices.
Dao informed the city had invited several gas trading companies to participate in the price stabilization program. So far two enterprises have agreed to join and committed to keep prices stable in six months.
Speaking to the Daily on the sidelines of the meeting, Dao declined to give details about the scheme, but said the most important thing is to build an appropriate mechanism for this commodity.
Given the recent gas price volatility, Minister of Industry and Trade Vu Huy Hoang said the ministry would have measures though gas is driven by the market, with local retail prices based on import prices plus some expenses and certain profits.
Commenting on the gas price stabilization scheme, the leader of a gas company deemed the scheme unfeasible because local businesses are not strong enough to keep prices stable while global prices are fluctuating unpredictably. Instead, the management agencies should flexibly use such tools like import tariffs to stabilize gas prices.
Heavy reliance on global prices
The exploitation output of liquefied petroleum gas (LPG) in January is some 65,200 tons, rising 26.3% year-on-year, sufficiently and timely supplying the domestic market during Tet.
However, a representative of a gas trading company said though the domestic output has increased, local gas prices are still strongly dependent on the world’s prices. The current proportion between imported gas and local supply is 60-40, because the rising output still does not meet the surging demand.
At present, gas output from the plants in Dinh Co in Ba Ria-Vung Tau and Dung Quat in Quang Ngai is distributed to trading firms through biddings every six months. The selling prices are basically equal to the global prices.
“The rising local output only makes supply more plentiful and stable, leaving no impact on prices,” said the leader of a gas company.
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